INTERVIEW WITH MOHSIN ADHI, DIRECTOR ALFA ADHI SECURITIES (PVT.) LTD.
Mar 5 - 11, 2012
Bringing the experience of capital market as in the field of education, Mohsin owns a brokerage house at Karachi Stock Exchange (KSE) with the name of "Alfa Adhi Securities (Pvt.) Ltd." His experience includes membership activity in Lahore Stock Exchange (LSE), Buy Back of shares, Branch expansions, etc. He has also served as a committee member of New Product Development Committee of KSE for two years working on products like Index Futures, Cash Settle Futures, Islamic Index and various other products. He has privilege to be a part of various business schools like Bahria University, SZABIST, etc. as a visiting faculty member. His academic background augments his market exposure, which consists of MSc. (Finance and Financial Law, London, UK) and MBA (Finance). Moreover, in order to flourish his career in teaching, he has learned "Case Method of Teaching" (LUMS). Mohsin is also involved in various other entrepreneurial and social activities. He has served Honorary Secretary General of Memon Professional Forum.
PAGE: HOW WOULD YOU COMMENT ON MICRO FINANCE BANKS IN PAKISTAN?
MOHSIN ADHI: Micro financing has huge potential in underdeveloped countries like Pakistan but unfortunately this segment of banking is yet to be explored here. We can say that about five per cent to 10 per cent of potential is approached through various NGO's. We have examples like Bangladesh (Grameen Bank) and Sri Lanka, which lead great examples of micro financing in underdeveloped countries. Main purpose is to reach to poor people living below poverty line, assist these people with nominal amount of loan in order to uplift their community. There are various sectors, which could boost home industries with the help of micro finance like handicraft, farmers, sports goods, clothing, etc. One of the important hurdles in development of micro finance in Pakistan is illiteracy, which hampers credibility of low level working men and women. The same is developed in countries like Bangladesh and Sri Lanka where the literacy rate is much high.
PAGE: YOUR VIEWS ON MARKUP BEING CHARGED BY MICRO FINANCE BANKS.
MOHSIN ADHI: Too high. One of the hurdles is illiteracy but another important factor is high cost of borrowing which doesn't motivate low income earning families to pay huge financial cost and save something out of it even after paying financial charges. Poor families cater to those goods, which are not producing large profit margins so this high interest rate cost is a problem.
PAGE: YOUR VIEWS ON MICRO FINANCE BANKS IN THE WORLD.
MOHSIN ADHI: Micro financing is growing across the underdeveloped countries. It has been witnessed that Pakistan's microfinance coverage of poor families is lowest to two per cent (among South Asian countries). Among six South Asian countries Bangladesh and Sri Lanka are categorized in high coverage. Nepal and India are in medium whereas Pakistan and Afghanistan are in low outreach coverage. Same is the case with African countries where many international NGO's are working as micro financer.
PAGE: YOUR COMMENTS ON ECONOMIC BUILDING ROLE OF MICRO FINANCING IN PAKISTAN.
MOHSIN ADHI: To bridge the gap between poor families and high net worth client, micro finance is the only tool. As lower class has skills to sell but lacks capital to promote such skills, these could be supported by microfinance banks. Islamic economic system insists on circulation of money and this is possible through micro financing. Investors can invest at smaller levels with the help of micro finance banks and poor families can start earning based on their specialized skills. Once these families become self sufficient, they can then invest their money through micro finance banks and in this way circulation of money is facilitated/ Poor families can get opportunities to raise their standard of living and accordingly strengthen Pakistan's economy with the help of taxation, literacy and other means of spending like health, education, foods, etc.
PAGE: YOUR COMMENTS ON BANKING SECTOR.
MOHSIN ADHI: The world is witnessing deep financial crisis and banks across the globe are suffering from nonperforming loans, currency crisis, derivative products issues, and many other problems. Comparatively, Pakistan is in a much better position. The only thing, which hampers profitability of banks in Pakistan, is economic instability. Most of the problems are self-created like government borrowing, lack of planning and policies implementation, lack of confidence building of private investors, etc. Once these problems are encountered, the country with huge potential could easily move towards developed nation InshAllah.